管理層發言
Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Second Quarter 2026 Results Conference Call. Operator Instructions: I would now like to turn the conference over to Siren Fisekci, VP, Investor Relations. Please go ahead, Ms. Fisekci.
Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our second quarter 2026 results. This call includes forward-looking statements and information and references non-GAAP measures. Please see the cautionary statements in our MD&A, Q2 news release, and presentation slides for the period ended June 30, 2026, all of which are available on our website. I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.
Good morning, everyone, and thank you for joining us today for our Q2 2026 conference call. Q2 delivered strong financial results, strong silver production and meaningful progress on our growth projects. We generated $344 million of attributable free cash flow, returned a record of $300 million to shareholders and reached an important milestone at La Colorada in early August with the first cut of the 588 decline to access the Skarn deposit. Attributable silver production of 6.5 million ounces in Q2 was at the high end of our quarterly guidance range, driven by continued strong performance at La Colorada and Juanicipio. We remain on track to achieve our full year silver production guidance of 25 million to 27 million ounces. Q2 Silver segment all-in sustaining costs were $17.80 per ounce, primarily reflecting higher cost ounces from the inventory drawdown that had accumulated at La Colorada in the first quarter of 2026, higher royalties at La Colorada from mining more tonnes than initially planned from the adjacent third-party concession, unfavorable currency exchange rates, and higher labor-related costs. Attributable gold production was approximately 166,000 ounces, which was below the quarterly outlook issued in February. We expect Q2 to be the weakest gold production quarter of the year with production more heavily weighted to the fourth quarter as we indicated in Q1. Gold segment all-in sustaining costs were $1,984 per ounce in Q2, slightly above our quarterly outlook due to the lower-than-forecasted production as well as labor and materials inflation. Importantly, for the first half of the year, all-in sustaining costs were below the low end of our guidance range for silver and in line with our guidance range for gold. Based on performance to date, we are reaffirming our full year 2026 operating outlook ranges for silver and gold production, silver segment and gold segment all-in sustaining costs and sustaining capital. Within that outlook, we now expect full year gold production to be at the low end of the 700,000 to 750,000 ounce guidance range. We have also revised our third quarter gold outlook to approximately 3,000 to 6,000 ounces below the low end of the quarterly guidance range of 178,500 to 192,000 ounces of gold. The change in our near-term gold outlook primarily reflects lower-than-expected production at Jacobina and El Peñón. At Jacobina, gold production is now expected to be approximately 10,000 ounces below the low end of the original annual guidance range of 181,000 to 191,000 ounces, reflecting changes to mining sequencing. The mining method employed at Jacobina over the last 40 years has been open stoping with very few of the stopes backfilled. Over the last several years, Jacobina has experienced seismic events. While these events have not resulted in any injuries or infrastructure damage, after reassessing the risk associated with seismicity, we have implemented measures in Q2 that include leaving larger pillars, reducing production rates in some higher-grade areas and increasing development rates to open more mining zones. These measures will result in overall mining grades coming in closer to average mineral reserve grade. Longer term, we are evaluating alternative Avoca-type mining methods in certain areas with waste rock backfill and cemented backfill as part of the optimization of the Jacobina operation. Jacobina continues to be a standout performer in generating cash flow with a long reserve life and significant optimization potential. We are advancing several process plant upgrades, including installation of new carbon-in-pulp tanks and electrical control system, both of which are expected to be commissioned this year. We're also advancing conceptual engineering to streamline and simplify the process plant flow sheet, which will feed into a trade-off study to evaluate whether upgrading the existing process plant circuitry and removing obsolete equipment or building a new state-of-the-art processing facility is the optimal choice for this long-life asset. At El Peñón, silver production is expected to remain within the original annual guidance range of 3.65 million to 3.95 million ounces. Gold production is now expected to be approximately 10,000 ounces below the low end of the original annual guidance range of 104,000 to 111,000 ounces, reflecting lower-than-expected continuity in certain secondary structures. Across the portfolio, we expect gold production to improve over the balance of the year, weighted to the fourth quarter, as previously indicated. Second half production is expected to benefit from higher gold grades and higher throughput at Timmins and Shahuindo. We're also managing the effects of El Niño at our operations in Chile and Argentina. Extreme rainstorms have affected site access for key personnel in July and into August. Our teams are actively managing these conditions with safety remaining the top priority. Turning to our financial results. Revenue was $1.1 billion, and attributable revenue, including our 44% interest in Juanicipio, was $1.3 billion. Net earnings were $305 million or $0.72 per share, which includes a tax expense of $179 million. Adjusted earnings were $0.73 per share. Cash flow from operations was $320 million after $205 million of income tax paid and $17 million used for working capital. Attributable cash flow from operations was $418 million and attributable free cash flow was $344 million, including our share from Juanicipio. Q2 is expected to be the highest period for taxes paid in 2026 due to final settlement of taxes for 2025. Higher metal prices have increased profitability and tax payments. As a result, we have increased our 2026 guidance range for income taxes paid to be between $585 million to $635 million. Our financial position remains very strong. We ended the quarter with $1.8 billion of cash and short-term investments, including cash attributable to Juanicipio. In July, we renewed and amended our 5-year senior unsecured revolving credit facility, doubling its size to $1.5 billion and adding a $750 million accordion feature. The facility remains undrawn, and our total available liquidity is approximately $3.2 billion. This financial strength gives us substantial flexibility to invest in our operations, advance organic growth projects and return capital to shareholders. At La Colorada, development of the 588 decline to access the Skarn deposit is underway. This is a key step in advancing the planned expansion outlined in the revised PEA released in March. Engineering for the material handling system and ventilation shaft is also progressing with the design, cost, schedule and recommendation expected before year-end. At Timmins, we are advancing the first phase of the Timmins Camp project, including the Bell Creek shaft expansion and two exploration drifts to access Vogel and Samson deposits. We plan to release updated mineral resource and mineral reserve estimates in the third quarter and a preliminary economic assessment for the Timmins Camp Project in the first half of 2027. At Escobal, the ILO 169 consultation process continues. Government representatives visited the mine in May. We met with representatives of the Ministry of Energy and Mines and the Vice Minister of Sustainable Development in June and a bilateral meeting between the government and the Xinka representatives was held in July. There remains no time line for conclusion of the consultation process and no date for the restart of Escobal. Our strong free cash flow is translating into meaningful shareholder returns. In Q2, we returned a record of $300 million in share repurchases and dividends. To date, in 2026, we have repurchased over 7 million shares under our Normal Course Issuer Bid. We have also declared a Q2 dividend of $0.184 per common share. The enhanced shareholder return framework we announced in May is operating as intended. Repurchases reduced the share count, increasing dividends per share and each shareholder's exposure to our asset base and future free cash flow generation. That free cash flow generation remains robust, and we will continue to balance shareholder returns with investments in our growth portfolio. And with that, I will turn over for questions.
分析師問答
Operator Instructions: The first question comes from Lawson Winder with Bank of America Merrill Lynch.
I'd like to start with the elephant in the room, which is Jacobina and the production issues at that asset and what that has meant for 2026 guidance, your expectation to now be at the lower end of the gold production range? When you think about what's happened and what you've provided the market with today, what does it mean for sustaining gold production at that mine into 2027 and beyond at that just under 200,000 ounce per year range? Does it impact 2027 at all?
When you look at Jacobina and the seismic activity, I want to be very clear that this seismic activity has not created any damage to our infrastructure or anything like that. This has been ongoing for many years at Jacobina as the mining method is open stoping with pillars. Over extended mining, you will see activity. If you recall, it was always our plan as part of our optimization study to install a backfill plant. For several reasons, we want to transition the conventional tailings dam into a dry stack tailings facility over time, and then use some of that tailings as backfill in the mine. That was always the plan. Consulting with our specialists and the systems we have in place, we decided to accelerate this work, relieve the main zones somewhat, and develop faster into other zones that we have in the mine. That requires more development right now, and as you saw, it impacted gold production. We guided down by about 10,000 ounces less production, so not a massive impact this year. There are mitigation measures. As we described, we are leaving larger pillars at the moment as a short-term mitigation. Once we have the paste backfill in place, we will be able to recover a large part of those pillars. So these reserves are not lost. We are just moving into other areas, some of which have slightly lower grade gold than what we mined previously, hence the difference. This is a postponement of production into the future and an investment in a stronger, larger Jacobina. We accelerated the program to be on the safe side, but I don't see any significant long-term impact. Jacobina has a reserve life extending into the 2050s. We continue to have strong exploration success. In the big picture, I don't see a major long-term impact. Short term, we've reported about 10,000 ounces lower production this year.
Thank you for that perspective on the short-term nature of these issues. You also described in the MD&A that El Niño impacts may continue to cause disruptions through the remainder of 2026. Will those potential impacts have been factored into the updated language around the gold production guidance?
The El Niño impact we've seen mostly in Chile so far. You may have heard about the big impact to some copper production in Chile. We had very strong rains, especially in the south in Florida and it actually carried over to Cerro Moro, where we experienced heavy rainfall. When it gets very wet, there are daily challenges in moving ore to the plant and maintaining throughput when material is very wet, but we haven't seen major operational impacts. The biggest impact we experienced was not rain-related at our operation; it was infrastructure damage to roads in Chile that made it challenging to fulfill shifts and bring all personnel in at 100%. We are mitigating that with different transport routes, flying personnel in and out to Antofagasta, and other measures. That is included in our plan. It remains to be seen how the El Niño evolves this year; it looks like a strong phenomenon given sea surface temperatures. El Niño typically progresses northward and often impacts Peru closer to the end of the year. We are preparing our operations, ensuring diversion channels and holding ponds are ready for larger rain events. If impacts are more severe, we will inform the market. At the moment, impacts have been secondary, primarily due to road infrastructure interruptions in central and south Chile.
Okay. Great, so it sounds like that is well factored in. Finally, there wasn't a lot of direct discussion this quarter about the plan to return up to $1 billion of cash to shareholders this year through both buybacks and dividends. Can you confirm that remains the target, despite it not being highlighted as clearly this quarter as last quarter?
We published the plan last quarter, and we are following that plan. We returned $300 million this quarter, which puts us ahead in the plan. We put the plan in place after Q1, so we had to catch up from Q1, when we paid the normal dividend and spent about $25 million in share buybacks. So the catch-up is happening and we are on track. The idea we published was to distribute about 35% to 40% of free cash flow to shareholders, and that remains in place. We're focused on the number of shares we are buying back. The program is active and strong; we are ahead of plan.
Above 7 million.
And how many shares in July? We continued buying shares in July.
In July, it's over 2 million shares.
Operator Instructions: The next question comes from Wayne Lam with TD Securities.
Maybe just following up at Jacobina. Back a couple of months ago at the Investor Day, the discussion centered around the potential to increase production and efficiencies at Jacobina. I was curious, was there a seismic event in the past couple of months that prompted this reevaluation of the mining method underground? And in light of the changes, potentially moving to more selective mining, is there still potential to scale production at Jacobina going forward as per some of the optimization work that you're undertaking?
This is, as I see it, more of a short-term impact. There is ongoing microseismic activity. We applied precautionary measures based on our microseismic monitoring to ensure safety for our personnel and infrastructure. There has been no damage. Over mid- and long-term, the potential for expansion remains intact. We are working at full speed on optimization, investing in the plant and looking at alternatives. I'll pass it to Martin to provide more detail on the plan.
Wayne, as we look at the optimization project going forward, we're looking at completely revamping the plant and the tailings facility. As Michael mentioned, we need to move to filtered tailings and we're advancing the paste backfill work underground. We've completed a lot of the test work required on strength and rheology for paste backfill. These components are advancing. The plant upgrade will take time. The current facility is at capacity, but we will look at increasing plant size as the study progresses. We are still determining what the mine can sustainably provide to a larger plant, and that's part of the ongoing work. We expect, because of these measures, to move production grades towards the mine reserve average grade as we open new areas.
So it sounds like there's work being done to increase mill capacity, but you haven't completed the analysis to determine whether the mine can sustain that expanded mill capacity?
Nothing has changed on that program we showed at Investor Day; the work is ongoing and not yet complete. We are working on the optimum mill size. We are evaluating increasing productivity in the current mill, including increasing recoveries, and we are also evaluating the construction of a completely new mill. We are planning long-term mine life into the 2050s with likely strong reserve replacement. A larger, state-of-the-art plant at Jacobina may make sense, but the technical work is ongoing and advancing at full speed.
Regarding El Peñón, the mine has historically had a short reserve life that has been continually extended. With the depletion of stockpiles, what proportion of production was historically from stockpiles? Do you see this phase of lower continuity mineralization as transitory or something to model going forward? Will this be reflected in the upcoming reserve update?
We will publish our midyear reserve update in early September, and it will include the recent changes and exploration results. The smaller parallel structures have lower continuity and need more drilling, so some were removed from the reserves for now and moved to resources pending follow-up drilling. We replaced some of that planned production with material from other structures that have higher silver grades and lower gold grades. That's why silver production is on track but gold is tracking lower. We are continuing exploration at El Peñón. It's still a very large cash generator and a very productive deposit with more discovery potential. For the near term this year, the move into higher-grade silver and lower gold will likely continue.
Okay. Maybe last one on Timmins. Can you give more color on the guided increase in production in the second half and an update on the ground condition issues encountered last year with the planned increase in mining rates?
Things are going well at Timmins. We've had some ups and downs in production rates, but geotechnical seismicity hasn't produced any large events recently. The paste backfill implemented at Bell Creek is helping with ore body recovery and stability.
The plan remains to present the new Timmins PEA, likely by mid next year at the latest. The PEA will incorporate the satellites we are developing and ongoing exploration. The PEA will provide updated reserves, resources, mine plans, costs and capital requirements and is expected to add substantial mine life to Timmins.
Operator Instructions: The next question comes from Cosmos Chiu with CIBC.
My first question is on the financial side. You missed earnings compared to consensus this quarter, in part due to higher taxes. Could we talk about higher taxes? I noticed the tax rate was about 37% in Q2, higher than the 32% in your first half. With commodity prices where they are today, is 37% the new normal? In the MD&A you mentioned higher taxes resulting from higher commodity prices. For the second half of the year you're forecasting $60 an ounce for silver and $4,000 an ounce for gold, which is slightly lower than spot today. If commodity prices remain elevated, could taxes come in higher than your revised guidance?
Cosmos, yes, on taxes we see variability quarter-to-quarter on the effective tax rate. In Q2 we saw rates in the high 30s, while Q1 was in the high 20s. Year-to-date, we're in the low 30s, which is where we expected overall. There were true-ups related to previous quarters, some adjustments, and those drove variability. For the year as a whole, we're tracking in the low 30s. Regarding taxes paid, the first half is typically higher than the second half because of true-ups that are paid in Q1 or early Q2 related to the previous year's profitability. In 2025, we saw a spike in profitability in Q4, which drove larger true-ups payable in early 2026. That's the driver of larger tax payments in the first half. For the rest of the year, we have re-guided to a range of $585 million to $635 million, which reflects metal prices as they are today and higher profitability. Another factor is repatriation: with strong operational cash flows, we are repatriating cash and withholding tax applies, which is a frictional cost of moving money around the company. That also affects the overall tax payments range.
At the operational level, on El Peñón you mentioned lower-than-expected continuity in certain secondary structures, yet silver guidance was maintained and gold guidance was reduced. Do those secondary structures impact gold more than silver? I thought at El Peñón the gold and silver grades were fairly consistent together.
At El Peñón there are both very silver-rich veins and very gold-rich veins, and production is a blend of both. Some of the smaller secondary structures we removed from the mine plan due to lack of continuity are the ones that would have contributed more gold in some cases. We moved those into resources pending more drilling. To replace that production we developed more silver-rich and less gold-rich areas, which is why silver guidance remains intact while gold is down. It's a constant blending play at El Peñón between gold-rich and silver-rich veins, and that's what we're seeing in current development.
One last question on project capital. Year-to-date you were below expectations at about $84 million versus an expectation of $103 million to $110 million. You maintained guidance for the year at $240 million to $255 million. Is this timing-related, and where will you catch up in the second half?
Yes, timing is a major factor. Weather plays a big role: different jurisdictions have different optimal seasons for capital work. We operate across a wide geographic and climatic range from southern Argentina winters to Mexican summers, so timing differences matter. I'll hand it to Scott for more detail on specific items.
Cosmos, exactly. We had a national strike in Bolivia which delayed mobilization of our key tailings expansion contractor, causing some lag. The market for large contractors in Peru and Mexico has been competitive and there were delays in mobilization there as well. No projects have been postponed; it's just a timing lag and we'll pick up the spending later in the year.
To clarify, the Bolivia strikes were on national roads and unrelated to mine operations, but they did affect our mobilization timing.
Operator Instructions: The next question comes from Carey MacRury with Canaccord Genuity.
On royalties at La Colorada, you're operating on adjacent ground. Can you give guidance on what we should expect in the back half of this year and into 2027?
Royalties were a bit higher in Q2 but will even out during the year. There will be less tonnage coming from the adjacent concession later this year. It's short-term variability in our mine plan to get onto our claims fully. The PEA shows the plan and over time royalties from that adjacent ground will reduce. To be clear, 100% of the Skarn resources are on our claims and the new vein discoveries we have been drilling are on our claims. The higher royalties this quarter were a short-term matter related to the tonnes mined from the adjacent concession.
Great. Regarding the credit facility, you have substantial cash on the balance sheet, strong cash flow, and you doubled the facility with not a lot of near-term capital spend. What is the thinking on increasing the facility?
Carey, increasing the facility provides financial flexibility. Market conditions have been favorable for investment-grade issuers, and it was an opportune time to expand the facility. Having that flexibility is positive so we can react quickly to opportunities when they arise.
We have very strong liquidity, roughly $3.2 billion including the undrawn line. We have major projects underway including La Colorada Skarn, Jacobina optimization and Timmins. Doubling the revolving credit facility was an opportune action; it remains undrawn but provides additional flexibility as the company grows and executes big projects.
Operator Instructions: The next question comes from Don DeMarco with National Bank Financial.
Starting with Escobal, I see you hosted government officials at the mine during the quarter. Can you share incremental color on the meeting? For example, is this the first time those officials visited? Was there a specific purpose to the visit?
It's not the first time. Authorities and representatives of the Xinka visit periodically, as do community representatives. We host many visits and the mine visits go well: people can tour the plant, go underground, see the dry stack tailings facility and our environmental work. This was a normal course visit with reviews and discussions; no particular additional reason beyond that.
On Jacobina, is any preemptive mining support or other work requiring additional CapEx? Or will any extra needs be covered within existing sustaining CapEx budgets? Is the measurable impact from the seismic limited to the 10,000 ounce production reduction?
The primary impact is the modest production reduction this year. We are advancing the optimization study and the engineering for the paste backfill and plant work; once we have engineering complete and decide on size and location for the paste backfill plant, we'll share the capital details. At the moment the impact is limited to the small production reduction.
Year-to-date silver costs are tracking below the low end of guidance and you've reaffirmed guidance for the year. Is that conservatism, or is there anything in H2 suggesting silver costs might rebound higher toward the midpoint of the range?
For the first half we are tracking well on production and cost for both silver and gold. Quarterly variations occur due to timing of payments, bonuses and true-ups. Byproduct credits have a significant impact on unit costs; higher metal prices in Q1 increased byproduct credits and pushed costs down, and lower metal prices in Q2 reduced byproduct credits, increasing costs. Foreign exchange is another large impact since our operations incur costs in local currencies while we report in U.S. dollars; currency strengthening affects costs. Energy and diesel are additional factors. Given the influence of metal prices and FX—areas we cannot control—we prefer to maintain guidance and observe Q3 before making any adjustments. We are pleased with how costs have tracked for the first six months for both metals.
Operator Instructions: We have a follow-up question from Lawson Winder with Bank of America.
On Escobal, since approval of the Era Dorada construction permits there are signs of stronger government support for mining in Guatemala. Do you see a more forceful level of government support generally? Era Dorada highlighted community water purification efforts from volcanic ash unrelated to mining that generated community support. Is there a similar initiative at Escobal that could help community relations? More broadly, what are the key issues currently discussed between the government and the Xinka?
You should not draw parallels between different projects. Each project in Guatemala operates in different communities and has different realities. Escobal must go through the ILO 169 consultation, which is a court-ordered process that has been ongoing for years. Discussions at Escobal are around typical mining topics: water, dust (although dust is less of an issue for an underground mine), tailings, vibration from blasting, and other local impacts. Those are the main discussion items. It's important to focus on each project individually rather than inferring outcomes from other projects in the country.
Regarding the reserve and resource update timing, you mentioned third quarter. Can you put a finer point on this? Could it be out later in August, or is it a mid-September event?
It will be a September event, early September—just a few weeks away.
This concludes the question-and-answer session. I would like to turn the conference back over to Michael Steinmann for closing remarks. Please go ahead.
Thank you, operator, and thanks, everyone, for calling in today. Strong silver production and strong financial results bolstered our already robust balance sheet even further and allowed us to return, as you saw, $300 million to shareholders between share buybacks and dividends. Our capital allocation priorities remain the same: maintain a solid balance sheet with $3.2 billion of liquidity including our undrawn line of credit; invest in high-return projects such as La Colorada Skarn, the Jacobina optimization and the Timmins project; and continue to deliver solid returns to shareholders via buybacks and dividends. We already see metal prices recovering from their typical summer low and hope that continues. As I mentioned earlier, we plan to release our mineral reserves and resource update in September and look forward to updating you on our exploration successes and results. Until then, thanks, everybody, for calling in.
This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.